Donor Advised Funds

Local Issues. Local Solutions.

Donor advised funds (DAFs) are a unique philanthropic tool that allow donors to establish charitable accounts at institutions, such as community foundations, and remain involved in supporting the issues and causes they care about. When a DAF is established, donors relinquish personal control of the funds to the community foundation, which then oversee and manage these funds on behalf of the families, groups, or individual donors. All funds distributed from these DAFs must be used for qualified, charitable purposes, and community foundations often have the discretion to direct DAF funds toward the most pressing issues in their communities.

Beyond the support they provide for important local issues, a 2014 Urban Institute survey on community foundations, commissioned by the Council, illuminated multiple other meaningful functions of DAFs. Importantly, DAFs support long-term solutions for tough community issues, serve to encourage civic and philanthropic engagement in communities—especially when several generations of family members are involved, and offer the flexibility to respond quickly to emergencies and unpredictable issues.

Despite these significant benefits of DAFs in communities across the country, some commentators, academics, and even some policymakers, have expressed skepticism that undermines the fundamental and long-lasting value of endowed philanthropy. This skepticism has sparked misguided policy conversations and short-sighted proposals to regulate this philanthropic tool in a way that could considerably impede on the generosity of individuals to give back to, and strengthen, their communities.

The Council strongly opposes payout requirements for DAFs. We are working extensively with our colleagues in the field to engage with lawmakers and protect the positive impacts of philanthropy in your communities. We continue to highlight the enthusiasm of the majority of community foundations to voluntarily institute strict operating policies and preserve the highest degree of integrity and excellence by engaging in peer-regulation through the National Standards for U.S. Community Foundations® program.